Abbott says tax and federalism changes will be a long fight

Prime Minister Tony Abbott has pressed the need for a broad overhaul of the federation. AAP/Paul Miller

Tony Abbott has declared he will make the case for changing the tax system and the federation, but said the outcome will depend on community acceptance.

Again striking a cautious note as he tries to pave the way for big reforms, Abbott told a Business Council of Australia dinner: “As a conservative, I’m not inclined to force reforms on an unwilling people – rather I’m inviting our people to discuss how we can grow and be our best selves”.

The Prime Minister this week has pressed the need for a broad overhaul of the federation, while also indicating it might in the end prove too hard. He’s also opened the prospect of changing the GST, but told the Coalition parties today that would only happen if all states agreed.

He said tonight: “The white paper on the reform of Australia’s tax system is not about extracting more revenue and the white paper on the reform of the federation is not about more power to Canberra.

"Instead, reform aims at a simpler and fairer tax system with more incentive for all Australians to follow their dreams. Reform aims at a simpler and more efficient system of government where people know who does what and know who to blame when things go wrong.”

He said the lesson of history showed that serious reform took time. “That’s why it must start now if it is to come to fruition within the next five years.”

He invited the Labor Party “to join Team Australia and think of our country and not the next election”.

But Labor this week has homed in on Abbott raising the GST as foreshadowing another broken promise. Before the election he promised no change in the GST “full stop”.

Abbott said the last time Australia had big tax reform, the BCA “was leading the charge”, and asked what it would do now to make tax reform and reform of federalism happen.

“We will only get change if the people who do believe in it are prepared to fight for it.”

Introducing Abbott, BCA president Catherine Livingstone said tax reform and reform of the federation were a “critical complement” to other initiatives the government had underway.

“The Business Council will continue to do all that we can to facilitate well-informed national discussion and the identification of common ground that makes change possible,” she said.

“The next five years will be crucial to the Australian economy making a successful transition – to having the sustainable capacity to generate the jobs of the future.”

In parliament, Treasurer Joe Hockey said he had tried to obtain from Treasury modelling on changing the GST and the household impact after it had been in the media. But Treasury had told him it was done for the former government and he could not have it.